Chalk

The Good News First

August 4 2014 –   Well, after looking at the weekly charts of Metals, Miners and the $USD…I would say that the Good News is that we can expect a Bounce In $Gold & Miners short term,  but does that mean there’s Bad News Too?   To the Charts!

 

The $USD has had a nice run, it is a bit extended now.  

Using both daily cycles timing and Tech Analysis, I think it is due for a rest.

 

$USD  AND GOLD 2You can also see from that chart above in the middle column that a wedge has formed in Gold…so what does this indicate?

 

 

I showed the wedge last week and mentioned that as it approaches the APEX, it must break one way or the other. A descending wedge is a bullish pattern and selling volume was fairly light.

 

$GOLD WEDGE

 

 

Now looking at it below after Fridays close and in conjunction with the $USD here (upper column) …it appears that the Dollar will pullback & Gold should move higher.

 

USD AND GOLD

 

 Again, I posted this chart Thursday showing that golds pullback is normal so far, and a bounce here could attract buyers too.

 

GOLD DAILY

 

 

Miners also look strong on a weekly basis. Notice that GDX & GDXJ  remain above their break out area, remain above their 10WMA and the MACD is positive on a weekly chart too, so it has a bullish look to it.

 

GDX WKLY AUG 1

GDXJ Weekly Aug 1

 

And you should see the weekly charts of some of the miners. They look very good . In a previous report I showed charts of some miners that look solid,  for ex:   EGO (Aug 1) , GG, RGLD ( from July 25)  dailys below,  when GOLD sold off, they held up still near their highs…

 

EGO

GG

RGLD

 

So IS There bad news??  Well, notice that using a “True Strength Indicator” on a weekly chart  –  when you have a cross down, you usually get a deeper sell off into an ICL.  Notice this TSI crossed down on the weekly and what happened in prior instances.

 

TSI

Down we go??

 

Well – a few traders that I know that use Elliott wave better than I can   (I just look for the basic 5 ways and an A-B-C correction ) .  They are seeing a much deeper sell off.    These charts are NOT theirs, but basically reflect their view  ( Steve Chapman Still allowing for a possible bounce right here first). 

 

ELLIOTT WAVE

 

So , it may seem confusing to some at this point, and it may feel like we have been in this  Bull Vs Bear battle before. Well,  We have.  We are just taking it one step at a time for now.   After a  after a nice run up, you often get a sideways move before resuming direction or even changing direction.  Nimble Traders that read here often like to play the bounce ‘long’, they also like to flip & play the dips ‘short’. SO I report when I think we are at trade-able lows & could bounce,  or when I think we’re extended or due for a pullback.

Longer term investor types, however,  looking for a trend-  must accept that we are in a sideways move for the past year and a half  (Possibly bottoming process? Possible consolidation before continuing into a last leg down? ).   We have been able to play those “Meaningful lows”  or “ICL’s” which gave us a June 2013 multi week run up, a Dec 2013 multi week run up, and the recent May 2014 multi week run up.  That is where patience comes in for those looking to invest or trade in a longer time period.

You can see that  JUNE 2013,   Dec 2013,   May 2014 – they come only roughly every 6 months lately give or take. 

 

Just like we have been doing here since this site opened up….There will be  ‘things’ / signs to look for along the way , and as things change and the picture gets clearer  Ive Got It   we will try to make adjustments to stay on the right side of the trade , or at least avoid losses by being aware of the possibilities, honoring stops,  and staying alert.

 

Thanks for reading ,  best wishes for a great week!

 

~Alex